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Why Mergers of Carmakers Like Honda and Nissan Often Falter

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The Japanese companies are considering joining forces to survive in a rapidly changing auto industry, but auto history is filled with troubled and failed marriages.The Japanese automakers Honda and Nissan are discussing a possible merger, in a bid to share costs and help themselves compete in a fast-changing and increasingly competitive industry.But a merger, even of two companies from the same country, is no guarantee of success, and the history of automotive deals is littered with failures and disappointments.Combining two large, global manufacturing operations is an incredibly difficult feat that involves reconciling different technologies, models and approaches to doing business. A merger’s success rests on getting ambitious managers and engineers who have spent decades competing with one another to cooperate. Teams and projects have to be scrapped or changed, and executives must cede power to others. In some cases, the merging companies are hamstrung by elected leaders who force them to keep operating money-losing factories.Thomas Stallkamp, an automotive consultant based in Michigan, was involved in the struggles of one of the biggest auto mergers, the 1998 merger of Chrysler and the German company Daimler. Mr. Stallkamp spent years in senior roles at Chrysler and DaimlerChrysler.“Car companies are big, complicated organizations, with large engineering staffs, manufacturing plants all over the world, hundreds of thousands of employees, in a capital-intensive business,” Mr. Stallkamp said. “You try to put two of them together and you run into a lot of egos and infighting, so it’s very, very difficult to make it work.”Honda and Nissan announced plans this year to work together on electric vehicles, and on Monday they formally began talks about extending that cooperation to a merger that could also include Mitsubishi Motors, a smaller manufacturer that works closely with Nissan. A pairing would unite Japan’s second- and third-biggest automakers, after Toyota, and create a company that would be the third largest in the world by number of cars produced, after Toyota and Volkswagen.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    U.A.W. Holds Strike at GM, Ford and Stellantis. Here’s What to Know

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    Negotiators for the United Auto Workers union and the three large U.S. automakers — General Motors, Ford Motor and Stellantis, the parent of Chrysler, Jeep and Ram — remained far apart as a limited strike began on Friday.The strike is not a full-scale walkout by the union’s roughly 150,000 members but a “limited and targeted” work stoppage by about 12,700 workers that could expand if talks remain bogged down. It began after workers’ four-year contracts expired.The union must negotiate separate deals with each of the companies on issues including pay and retirement benefits.What is the union seeking?The U.A.W. has demanded a 40 percent wage increase over four years — an amount that union officials said matches the raises the top executives at the three companies have received over the last four years. Those raises are also meant to compensate for more modest increases the autoworkers received in recent years and the concessions the union made to the companies after the 2008 financial crisis.The union is also seeking cost-of-living adjustments that would nudge wages higher to compensate for inflation. And it wants a reinstatement of pensions for all workers, improved retiree benefits and shorter work hours, as well as and an end to a tiered wage system that starts new hires at much lower wages than the top U.A.W. pay of $32 an hour.What have the companies offered?As of last Friday, the companies offered to raise pay by around 14.5 percent to 20 percent over four years. Their offers include lump-sum payments to help offset the effects of inflation, and policy changes that would lift the pay of recent hires and temporary workers, who typically earn about a third less than veteran union members.It was not clear how much progress the union and the companies have made on the other issues.What have the negotiators said publicly?The companies say that they are investing billions in a transition to battery-powered vehicles, which makes it harder for them to pay substantially higher wages. They say they are at a disadvantage compared with nonunion automakers like Tesla, which dominates the sales of electric cars.On Thursday, G.M. said in a statement that it had made a new offer to the union and that the company was engaged in “continuous, direct, and good faith negotiations” in an effort to avoid a strike.Declaring that “the future of our industry is at stake,” Ford said on Wednesday that it was “ready to reach a deal,” adding, “We should be working creatively to solve hard problems rather than planning strikes and P.R. events.”Stellantis said on Wednesday that its “focus remains on bargaining in good faith to have a tentative agreement on the table before tomorrow’s deadline.”In a 40-minute address on Wednesday, the union’s president, Shawn Fain, called the automakers’ offers “insulting.”“For the last 40 years, the billionaire class has been taking everything and leaving everybody else to fight for the scraps,” he said. “We are not the problem. Corporate greed is the problem.”What will striking workers get paid?The union plans to pay striking workers $500 per week and cover the cost of their health insurance premiums. The union’s $825 million strike fund is big enough to cover payments to workers in a full strike against all three companies for about three months — although the U.A.W. has said it would expand the limited stoppage only if talks bogged down.What does the strike mean for consumers?Only certain models of cars are affected right now, but if the strike lasts long enough to start impacting inventories, car dealers will have fewer vehicles on their lots and may start pushing up prices on the ones they do have.This comes at a time when car prices had already been rising, and the average interest rates on auto loans had been climbing — making it harder for buyers to afford cars. More

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    What to Know About the Potential Autoworkers Strike

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    The union and the carmakers remain far apart on wages.The United Auto Workers union, which represents about 150,000 workers at U.S. car plants, could strike against three of the country’s largest automakers on Friday if the union and the companies are unable to reach new contracts.The three automakers — General Motors, Ford Motor and Stellantis, which owns Chrysler, Jeep and Ram — could be forced to stop or slow production if an agreement isn’t reached by midnight on Thursday. The president of the U.A.W., Shawn Fain, said that Thursday was the “deadline, not a reference point.”The union is negotiating a separate four-year contract with each automaker. The U.A.W. has never struck against all three companies at once, preferring to target one at a time. But Mr. Fain has said he and his members are willing to strike against all three this time.What’s at issue in the labor dispute?Compensation is at the forefront of negotiations.The U.A.W. is demanding 40 percent wage increases over four years, which Mr. Fain says is in line with how much the salaries of the companies’ chief executives have increased in the past four years.As of last Friday, the two parties remained far apart, with the companies offering to raise pay by 14 to 16 percent over four years. Mr. Fain called that offer “insulting” and has said that the union is still seeking a 40 percent pay increase.What role is the switch to electric cars playing in the negotiations?The auto industry is in the middle of a sweeping transition to battery-powered vehicles, and G.M., Ford and Stellantis are spending billions of dollars to develop new models and build factories. The companies have said those investments make it harder for them to pay workers substantially higher wages. Automakers say they are already at a big competitive disadvantage compared with nonunion automakers like Tesla, which dominates the sale of electric vehicles.The U.A.W. is worried that the companies will use the switch to electric cars to cut jobs or hire more nonunion workers. The union wants the automakers to cover workers at the battery factories in their national contracts with the U.A.W. Right now those workers are either not represented by unions or are negotiating separate contracts. But the automakers say they cannot legally agree to that request because those plants are set up as joint ventures.What happened in the last U.A.W. strike?The U.A.W. most recently went on strike in 2019 against General Motors. Nearly 50,000 General Motors workers walked out for 40 days. The carmaker said that strike cost it $3.6 billion.The strike ended after the two sides reached a contract that ended a two-tier wage structure under which newer employees were paid a lot less than veteran workers. G.M. also agreed to pay workers more.How would a strike against the three automakers affect the economy?A long pause in car production could have ripple effects across many parts of the U.S. economy.A 10-day strike could cost the economy $5 billion, according to an estimate from Anderson Economic Group. A longer strike could start affecting inventories of cars at dealerships, pushing up the price of vehicles.The auto industry is in a more vulnerable place than it was in 2019, the last time the U.A.W. staged a strike. In the earlier part of the pandemic, car production came to a halt, sharply reducing the supply of vehicles. Domestic car inventories remain at about a quarter of where they were at the end of 2019.Will a strike have political ramifications?It definitely could.President Biden has called himself “the most pro-labor union president” and sought to solidify his ties with labor unions ahead of his re-election campaign. But the U.A.W., which usually endorses Democratic candidates including Mr. Biden in his 2020 run, has held off endorsing him for the 2024 race.The union fears that Mr. Biden’s decision to promote electric vehicles could further erode union membership in the auto industry. Mr. Fain has criticized the administration for awarding large federal incentives and loans for new factories without requiring those plants to employ union workers.Former President Donald J. Trump, who is most likely to secure the Republican nomination, has been seeking to win over U.A.W. members. He has criticized Mr. Biden’s auto and climate policies as bad for workers and consumers. More

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    Which Electric Vehicles Qualify for Federal Tax Credits?

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    Here is a partial list of electric and plug-in hybrid vehicles that will qualify for federal tax credits in 2023.The Treasury Department on Thursday published a partial list of new electric and plug-in hybrid cars that will qualify for tax credits of up to $7,500. The list is expected to be updated over the coming days and weeks.The credits will apply to sedans that cost no more than $55,000 and sport utility vehicles and pickup trucks that cost up to $80,000. In addition, only buyers who earn less than $150,000 a year as an individual or $300,000 a year as a couple can claim the credits.The list could change in March, when new rules take effect that require automakers to use battery raw materials and components from North America or a trade ally. Those rules are still being formulated, and it’s not clear exactly when they will start to apply.Here are the cars on the list, by automaker:AudiQ5 TFSI e Quattro plug-in hybridFord MotorFord Escape Plug-in HybridFord E-TransitFord F-150 LightningFord Mustang Mach-ELincoln Aviator Grand Touring plug-in hybridLincoln Corsair Grand Touring plug-in hybridNissanLeafRivianR1TR1SStellantisChrysler Pacifica plug-in hybridJeep Wrangler 4xe plug-in hybridJeep Grand Cherokee 4xe plug-in hybridTeslaModel 3Model YVolkswagenID.4VolvoVolvo S60 plug-in hybrid More